Asia marts move higher, Japanese stocks up 4.9%

Asia marts move higher, Japanese stocks up 4.9%

SINGAPORE (Reuters): Japanese stocks surged 4.90 percent and other Asian stocks also moved higher on Monday as investors took their cue from Wall Street and went bottom fishing for bombed-out tech stocks.

In the short run, analysts said there was more scope for U.S. stocks to gain further and that should underpin a bounce in Asian markets as well.

"Short-term call:put ratio (in U.S. stocks) suggests U.S. market is oversold. Hence, it probably doesn't make sense to be aggressive sellers at this stage," said a report by Merrill Lynch.

"Given, the importance of US leadership to global stock markets, this is likely to be a useful indicator for emerging markets," it said.

The U.S. call:put option ratio is based on the volume of call options on individual U.S. equities purchased each week in relation to put options. A low ratio implied a significant degree of pessimism about the market which is a potential contrarian buy signal.

But over the longer term, analysts expected the market to hit several speed bumps in the form of bad economic indicators and corporate profit warnings before the worst is over.

Hefty gains in Japan's largest chip maker Toshiba Corp and other high-tech shares led the benchmark Nikkei 225 to close 647.77 points or 4.90 percent higher at 13,862.31.

The Nikkei has surged 21.2 percent since it touched a 16-year intraday low of 11,433.88 on March 15, while the capital-weighted TOPIX is now 18.90 percent above a two-year trough of 1,125.40 hit on the same day.

Korean stocks finished at a two-week high as Samsung Electro- Mechanics and other tech stocks rallied on the back of gains in U.S. counters.

Expectations that global PC makers would build up chip inventories as they ran out of stocks also boosted sentiment.

The KOSPI finished up 1.49 percent at 545.98 while the Kosdaq over-the-counter market rose 3.06 percent to close at 72.77, up 2.16 points.

Hong Kong stocks also racked up gains, bolstered by the strong performance of China Mobile, China's largest mobile phone company. The Hang Seng Index ended up 2.92 percent at 12,950.49.

In Singapore, the market was hit by worries that Singapore Telecommunications was overpaying for a deal to buy Australia's Cable & Wireless Optus

SingTel said on Monday it would acquire Optus for up to A$17.2 billion (US$8.4 billion) or A$4.57 per share in cash and scrip to create Asia's leading wireless carrier.

The offer value is about 14.5 percent higher than the value of Optus at Friday's close of A$3.99 per share.

But analysts expected the setback to be temporary as the deal should bode well for SingTel in the long run.

"This is a major transformation of a company which is traditionally seen as cash-rich, very secure and to some extent a safe proxy for the Singapore market," said Dominic Armstrong, head of research for Singapore and Malaysia at ABN AMRO.

"Now it is transformed into an internationally-geared telecom business. Its financial profile is now different and therefore it is going to bear a brunt on that security. It's a short-term price for that kind of transformation," he said.